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Are you maybe thinking of what MMTers e.g. Warren Mosler assert? (E.g., Mosler calling for 0% interest rates, always.) If you can think of source, please let m
by yasp 7y ago
Are you maybe thinking of what MMTers e.g. Warren Mosler assert? (E.g., Mosler calling for 0% interest rates, always.)
If you can think of source, please let me know. Sounds interesting.
Edit: It also sounds fallacious to me. Interest rates are central-bank determined because the central bank chooses to determine them. In the absence of a central bank controlling rates, there undoubtedly would still be interest rates. There ostensibly also still would be risk free rates. In some hypothetical parallel Earth, the Fed might instead choose to control the price of some other commodity, like oil. That doesn't mean that the price of oil would be "endogenous" and therefore that there's no market price. Just that the Fed had chosen to suppress that market price. Thus, as far as I can tell, it still makes sense to ask the question "what would be the market risk free rate?"
- dredmorbius 7y agoIt might have been John Quiggan, in this interview: John Quiggin, "Economics in Two Lessons: Why Markets Work So Well, and Why They Can Fail So Badly" (Princeton UP, 2019). Media: https://traffic.megaphone.fm/LIT7223813423.mp3 https://traffic.megaphone.fm/LIT7223813423.mp3 ... and if it's not, it's still a good interview to listen to (I'm giving it a repeat). Long, but informative. The other likely candidate was a Marketplace Radio segment a few weeks back. I'd have to go hunting for that.
- dredmorbius 7y agoNB: Definitely not in the John Quiggan interview (though I did enjoy listening to it again). The upshot was that interest rates and/or bond markets might once have been nominally open/free markets, but with the actions of central banks, that's far less the case, and reading activities as market actions is now far harder to judge.